Think your smartphone is expensive? Just you wait (The 3:59, Ep. 437)
Think your smartphone is expensive? Just you wait (The 3:59, Ep. 437)
2018-08-06
137 of the 359 podcast on BVG and we're
starting late because Ben's fault but
before we get to that I just want to
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org and here your hosts the late and
great Ben Fox Rubin and Roger Chang whoa
great well we're late we are tardy five
minutes thanks Ben what's five minutes
for a four minute podcast everything and
everything in the podcast
well happy Monday everyone like they'll
join us we've got as always a busy show
when we're talking about a nice break
down and wide at thousand dollar iPhone
X really just iPhone 10 is really just
the start of pricier phones we'll be
talking about t-mobile back in the news
with the cheaper plans which is kind of
bucking the trend those are the carriers
that are introducing more expensive
plans and lastly we wanted to give a
shout out to a great story by Katie
Collins on a bootcamp that's designed to
reform teenage hackers this program out
in the UK so with that you have any
questions leave it in the comments
section right will forgot the best I
will get to them in 3 minutes and 59
seconds stick around we'll see in the
chat and 3 minutes and 59 seconds from 3
to
welcome to the 359 I'm dr. Chang I'm Ben
Fox ribbon did you think the thousand
dollar iPhone 10 was pricey I'll get
ready open your wall it's even wider
that's according to our own Jessica Dole
Court who broke down why iphone prices
are just getting higher they're just
going up and Samsung and yeah oneplus
this isn't just about the iPhone this is
yeah exactly Samsung oneplus is probably
the most egregious example of a company
that started out with budget phones but
ultimately the prices kept creeping up
to the point where they're not really
they're not no brainer option anymore
right so there's an interesting
distinction here particularly for this
year the iPhone 10 is selling a lot
better than expected yes and you know
they pushed up the price and consumers
responded they bought it in droves but
the Samsung Galaxy S 9 Samsung made like
a rare I wouldn't call it a Maat culpa
but they basically said like look we
were too conservative we should have
added more bells and whistles so there's
still a bit of a distinction going on in
the market as far as that's concerned
yeah the funny thing is this story's
coming at a time where the rumors are
pointing to Apple at least offering a
bit of a price break under the next line
of lineup of iPhones you know they're
gonna change these around the prices
aren't really gonna change too much I
think there's supposed to be a maybe
$100 break on what is this year's
version yes still which is still like
signal right in that it's like they're
making you spend a little bit more to
essentially introduce a larger iPhone 10
wouldn't that thousand dollar price
point so they're still you know they're
still gonna make you pay a thousand at
one point but you have slightly cheaper
options so either way I also wanted to
mention too that a lot of this makes
sense people upgrade their phones a lot
less frequently usually it's a three or
four year window as opposed to one to
two years granted there are still people
that upgrade every year but at the same
time you can convince people to pay more
money for that when it's kind of like a
more mature market if you add more stuff
in those are all like really specific
reasons why the price would go better
front-facing camera
you know fingerprint sensors in display
gorilla glass better gorilla glass like
all that stuff starts to add up
hmm t-mobile is back in the news
introduced a new plan this morning
t-mobile essentials which starts at $60
for one line and $30 per line for four
lines essentially this works out to a
$10 discount from its normal plan but it
strips out things like international
data Netflix hotspot capabilities so
it's really a bare-bones plan and just
to clarify this is an unlimited plan
like the other one it is an unlimited
data plan you are kept at 480p or DVD
quality video streaming so it's not the
high-definition stuff but there are the
it definitely lacks the bells and
whistles of its other core t-mobile one
plan and this kind of goes against what
Verizon and AT&T are doing right where
they're like raising the prices if
they're yeah so basically Verizon
introduced a new option they didn't
raise the prices but they introduced a
new super expensive option 18t kind of
reshuffled their plans around so they're
a little pricier at the beginning and
spread just outright raise their prices
so everyone else was raising prices I
talked with the CFO braxton car last
week who t-mobile CFO who vowed that you
know they wouldn't be raising prices and
we go the hole they wouldn't they went
they went cheaper that is how they're
getting more customers it seems they're
trying to find ways to get more people
to jump on board by doing stuff like
this sounds to be working for them at
this point so as an alternative to
putting sorry let me start again
there's there's a program in the UK that
we wanted to profile Katie Collins what
to check out it's called the cyber crime
in intervention workshop essentially
it's a bootcamp that reforms young
teenage hackers mm-hmm basically this is
until term - you know putting putting
this on their permanent record or put
them in jail and really it's sort of
designed to get identify young talent
and if we put them on the right track
and actually get them into a technical
position in the UK which is something
that's lacking right now yeah definitely
all right for more of those stories
check us out on CNN I'm Roger Cheng I'm
Ben Fox Ruben thanks for listening
I didn't realize we'd run out in time
no I was like hoping to stretch out that
last story because it was worth talking
about it's good piece I never realized
that we've run out of time no matter how
many times I try I know I know I looked
at it like wait did we have five oh wait
we had four Brian yeah I'm just I'm just
chasing the action here guys so anyways
as you all know it is time to say hey
send in questions and comments you hear
me say this every damn week and you're
probably tired of it but yeah we want to
hear whatever you want to know about
this stuff specifically I think there's
a lot more to have with this
conversation that always unfortunately
gets cut short on the last story about
this boot camp I personally want to hear
more about that so would you guys maybe
elaborate more on what Katie Colin's
experience was like and yet the program
really entails this sounds like kind of
like a weird Sally Jessy Raphael Mike
what was like we're forming bed yeah
talk show kind of thing but I'm hoping
that it's a little bit you do that I'm
gonna go look for more questions it's
definitely not that I mean it's the way
the story starts out I mean there's a
there's a detective it comes up and
basically starts barking at these kids
but ultimately it's it's not that it's
you know it's almost like a it's a half
it breaks down you know what the rules
are for a lot of these kids who get
started in hacking don't realize what is
illegal so it was partly its educational
kind of teaches them what the laws are
but partly it's almost serves as a
career fair like people will come a
former like convicted hackers who now
kind of working as white hat hackers
show up and talk about sort the
opportunities that can come if you you
know if you are a if you're skilled in
the cyber and are looking to kind of go
legit there they're definitely career
opportunity so it's right there's no
career fair half like reformed boot camp
type things type of type event and you
know the it's fairly small scale there's
only eight you know there were eight
boys and attendance and parently it's
happened about three times so far but
you know some of the folks who organizes
program sort of see it as
that are alternative you know throwing
them in jail yeah on top of that if
you're a really successful criminal
hacker especially at a young age you can
imagine how there would be some pretty
lucrative opportunities if you did go
legit oh yeah I'm a consulting
perspective from like just an IT
perspective all sorts of things because
like as you mentioned like the like
reformed hackers like some of the adults
I'm sure in the program found that you
know testing systems yeah of major
companies is something that a lot of
them do so we're trying to find those
opportunities for for these folks I was
like I really after this program I mean
Katie talked to one of the the mothers
of the boys who was in snare or was
arrested she was contemplating whether
or not he needed to like finish school
or if he should just start jumping into
like an internship program or some sort
of apprenticeship in terms of learning
to become one of these security
consultants because after they realized
how lucrative a position could be in
this field you know she's like oh well
maybe maybe he doesn't even need to go
to school maybe he's bored at school
those things are entirely possible I
know if at least one dropout from
Harvard that ended up doing pretty well
for me yeah yeah and he was pretty bored
at school too and knew a lot about that
you know goes to show you I like I
finished college and look at me yes yeah
you said women sitting across from me
exactly do I have any questions the
other stories I'm assuming most of the
interest will be on our first two pieces
of course yeah let's talk about prices
and the problems that we're seeing in
the ever not changing cellphone market
Alex Mitchell says so because phones are
being upgraded less often
it tells manufacturers that they can
change more now I see why but it's going
to cause people to wait even longer
that's a great point to be made that's a
chicken-and-egg well yeah that's the
thing like they yeah if they get more
pricey you're gonna hold back and
upgrading but if you're gonna hold back
about doing that anyway yeah but if
you're gonna hold back on upgrading if
you're the manufacturer like well we've
got put even more stuff in there to get
you to upgrade which will drive the
price even higher it's the thing is is
that the manufacturer will
charge what the market can bear those
are just basic economics and the iPhone
10 proved that this is the price that we
can charge and we could charge even more
for increased storage that one is what
$1200 it's more than like 20% more than
$1000 it's pretty simple yeah I think
the max or the the most expensive iPhone
10 is roughly $1,200 and I would
probably argue that the most expensive
whatever the iPhone is going to be
called this year it's gonna be even more
expensive than that because it's gonna
be the iPhone 10 plus or whatever that's
what I was trying to say during the the
recording was that I think they're gonna
they're actually gonna give you a slight
price break and like the most expensive
iPhone will still be at a thousand
mm-hmm and so like the what was this
year's the the update to this year's
iPhone 10 or last year's iPhone 10 will
be will start at $900 remind something
that's I think that's what the rumor is
saying that the thousands sort of the
the limit that's the peak that's I read
for I read that that the plus this year
is going to be more expensive $1100
starting wasting they'll probably bump
up the storage that's what you get with
the rumors right like that you don't
know and like it's very difficult to
figure out with pricing with the rumor
stories because that could change on a
dime yeah as opposed to like the devices
themselves which are currently being
prototype manufactured those tend to be
a little bit more accurate well I mean
what were with the iPhone 10 I mean I
think a lot of people were expecting
what's known as a super cycle idea that
like everyone was gonna go an upgrade
and the fact that was $1000 probably had
people waiting a little bit of see you
know what what's next are holding off on
making such a big purchase the Apple
probably recognized that that's probably
why you're gonna see some slightly
cheaper alternatives right that's why
there are three phone that the rumors
three iPhones not not too so ways there
they had three last year they did not
three last year I just realized that but
it's like they're they're maybe they're
gonna be I five no they're gonna have
three iPhone tens but I think the range
of prices will be a little bit more
gonna be the same really think about
take a thousand you screwed up yeah
you're screwed either way so wait wait
wait so what you're saying is that
they're going to essentially including
some
form of like DLC for the phone you're
gonna start with the skeleton and to get
it up to where it would be concern a
standard smartphone it would need to
like buy all the modules to go into it
is EA's it sounds to me like EA is
starting to run Apple but that's just
none of my business no no no there's no
downloadable content it's not a sob
battlefield or was it battlefront
situation sure sounds like it
iPhone loot box there is no there'll be
three different models to all look like
this this last year's iPhone 10 but
one's gonna be a brick what but one's
gonna be a brick and it's gonna be the
one that the normal consumer can afford
I wouldn't go that far
I totally see what you mean probably
won't get the best camera it will get an
LCD display instead of an OLED display
but you know for most people that's
that's not a huge difference and also to
understand correctly where we sit on the
rumors this point there's not gonna be
an iPhone 9 and 9 plus right so right
that older design that old exactly that
old design is gonna get phased out I
guess that's why I was confused that
we're gonna get rid of those older ones
raisa cailli yeah all right so instead
of the one iPhone 10 you're gonna have
three iPhone 10 or whatever the hell it
called I can't wait to find all belie
fonox is we spend so much time figuring
sounds horrible it sounds like a
Nintendo game we'll see how he says how
are we allowing manufacturers to drive
the prices so high I was under the
impression that mass manufacturing would
drive the price down not up
hashtag highway robbery that's a
fantastic point like usually with the
you know skill of competition yeah just
with the the lower pricing of components
right like as you build more things are
supposed to be cheaper theoretically but
like that hasn't really played out part
of the issue is with every new version
they are introducing new technology
which hasn't had time to scale and so
the price that's why things are getting
more expensive right there's when you're
adding new components like Samsung's we
bought a body or like an ip67 model
waterproof waterproof yeah then like
some of that stuff starts to add up and
it's not it hasn't scaled yet
first it's like the rumor refered next
years Samsung phone is for an N display
fingerprint sensor that is that's gonna
be more pricey right because it's a new
component right and from what from
Jessica's art what she was arguing in
the story was that instead of looking at
it as an apples to apples comparison of
the higher-end market I think she was
what her claim was is that it's now
turning into super high-end so you could
still buy maybe some sort of I mean like
maybe the high-end exists like the year
ago models like you could probably still
get an iPhone 10 after these new ones
come out and it'll be cheaper and
that'll that all exists well the rumor
is that the current iPhone 10 goes away
really yeah they always provide the old
ones for at least a few more years I
think like the third model that cheapest
model is supposed to take its place oh I
see
okay yeah I could see that happening and
look the other point is it's not just on
the super premium n1 plus is a great
example she she listed as this was a
budget filner now it's more expensive
it's not a super premium phone by any
stretch but it's gone progressively more
expensive year after year and that's you
know that's concern like that was one
sort of a like a fantastic pick because
it was a cheap phone with with great
specs it still has great specs but the
prices the price is definitely creeped
up mm-hmm
send Roy says why don't people freak out
more about these increasing prices I see
only Sony taking a bashing with their
flagship price tags going on expanding
from that in similar conversations do we
think that this is going to further
alienate audiences is the ecosystem
going to shrink are their loyalty clubs
going to shut their doors and is this
going to give a better opportunity for
phones such as the red phone to kind of
step up the red phone is like super
dooper right now it's way more expensive
no one's gonna buy that thing people
will buy it all right it's slightly just
the five people will buy it you need
cargo shorts for that one because it's
not gonna fit in a regular pocket the
thing is dragons no look this is the
fact the matter is like we value our
smartphone more than pretty much
anything anymore
right it is our conduit to the outside
world it is our camera it's our
camcorder it's every
right and so there's sort of this mental
there's change in the mental
calculations that we have on what we can
justify right like ah well I could spend
800 bucks on our phone oh I do I spent
all my time on that thing so the way the
prices like food the pricing plans are
very similar to how they used to be I
get that we don't do contracts anymore
but with the device payment plans it
very easily hides yeah how much you're
actually paying and so if you put it on
a monthly basis and it's a zero interest
loan essentially what is the difference
- a customer between paying fifteen
dollars a month and thirty dollars a
month like you're not really gonna
notice but you're paying twice as much
no that's a fantastic point that's I've
noticed when carriers introduce new
phones they bill
rarely they rarely or don't list the
total price of the phone anymore they
just say this phone could be yours for a
twenty four monthly installments of for
the low low price right so like that's I
think that's what has made it more
palatable to a lot of people that just
the fact that it is yeah it's like 20
bucks it's like 2 or 3 cups of coffee
what's another five dollars you know but
like five dollars over the two-year or
whatever
yeah the two years of like the device
payment contract yes you know that's
more money in their pockets and Apple is
hurting Apple needs your money people
okay just send them the money they don't
have they need to get to two trillion
it's not a big enough company yet gross
hey Martin says smartphones are going to
be the new home PCs staying on par with
the concept of the overhead price that
we're all gonna start needing to pay a
dog kind of evaluates on that thinking
that phone should be about the price
comparable to a laptop this is a day and
age where you need a new phone every
year to two years it used to be the
phones you still last about five or so
that's never gonna be the case again
Timothy do says please don't tell me
that in like four years
the cost is gonna be about two grand for
a smartphone same price as a mortgage
what is the ceiling for this when you're
gonna have to choose between your phone
and your housing I mean like know look
if you don't want to pay for it there
are other options out there it's it's
and we've seen it with Samsung is that
Apple has always done a really good job
of having such a loyal customer base
that they're able to raise prices that's
that's what they do
with Samsung the Galaxy S nine just did
not have the bells and whistles that
people were hoping for it was too
conservative and folks didn't buy it
right so if Apple has a dud
then the similar thing could happen with
it it's really like it's what you'd like
however many number of customers are
willing to pay for it you know like the
fewer people that are willing to buy it
they're gonna price it lower it'll be
interesting also to see what Google does
with the pixel phone I mean a few years
ago the their their Nexus phones were
just totally beloved because they were
cheap but they were great like LG made
one that was pretty fantastic but with
the the new pixel phones they've got
they've definitely stepped up in price
they're definitely on the premium to
super premium category I want to see
what happens with the next versions that
come out in the next month or two I
guess my friends that have those really
liked them yeah oh so as far as like
that premium pricing they've they seem
to have justified it at least to the
customers that I know in my own life
that they're they're into it so yeah all
right
we're all screwed we're not screwed
though I mean we kind of dug this hole
ourselves you could really kind of call
Apple the greatest drug dealer of all
time because that's a good quote I mean
because they gave us that taste right
they brought out the iPhone and yes
we've seen touch screens before Apple as
per usual just kind of repolished it
repackaged it and marketed it better
they didn't innovate it so don't quote
me wrong on that one but they did do the
thing that kind of put it in a lot of
people's pockets and then made it
normalized and now that we've got it and
the prices are going up whether it's
corporate greed or necessary market
inflation now we're all starting to make
decisions about how essential is this in
our lives and where do I allocate my
money and can I survive without it it's
a very good point that you make Brian
for instance that I remember there was a
famous quote from Steve Ballmer when the
iPhone first came out and he said
nobody's nobody's gonna be willing to
pay what was it six hundred dollars I
was like yeah $600
yeah nobody nobody will spend no what
kind of crazy person would spend $700 on
a phone and look where we are now so
well I mean to be fair that first year
it wasn't a blow of success they
actually had to lower the price I think
six or seven months into it it wasn't
until they got into a contract structure
and then priced the phone to $200 that
people started you know really picking
up on it right so once they started
hiding behind the real price yeah well
back then the you know the price is
built into your phone plans so it was
way worse because even if you kept that
phone for awhile you're still playing
paying the more expensive phone plan
yeah I remember that that was pretty
awful Steve's still not wrong though
weird I mean no one's paying that much
for a cell phone anymore they're not
cell phones anymore that's true you're
right there they're definitely more than
a cell phone you're not paying for the
phone capability you're paying for
everything else that the phone can do
right and I think that was the paradigm
shift that he failed to really wrap his
head around was that any that you
weren't well I just him but everyone
else right the one when Apple came out
with their App Store then that's when
things really changed right because it
became more than just like a browser or
music player it became anything an app
developer could create mm-hmm yeah never
would have thought that paradigm shift
would have really happened to really I
mean it's a lot to take in in such a
short amount of time and yeah like from
one of the questions was saying $2,000
phone a couple years from now I guess
from this conversation I can see how
that's not the craziest thing ever
yeah I really hope we don't get to that
point but it is definitely possible I
don't think it's gonna get to 2,000 like
anytime soon that would be I mean a 100%
markup on a product in four years would
be pretty outrageous
all right I'm quizzing you here for a
second but the Samsung Galaxy Note do
you know like what the most expensive
one of those is don't think go to like
fifteen hundred or something no no no no
I think it's it doesn't there's only
rich though I think there's only like
one or two tiers for the note
memory lasts years now I'm like okay
holy its it stumped me it's okay okay
before we call it a day let's talk about
hacking real quick
matthew dieter asks are there teenager
hackers scouted for the jobs at CIA or
NSA well this is the UK program so I
don't oh sorry sorry I'm slow I was
multitasking okay so on the flip side
quantum of Olli says is there the
opposite option to this rather than
taking hacker kids and trying to get
into scare straight is there a school to
teach how to do hacking I want to learn
how to do hacking stuff I love the idea
of being a hacker ooh yeah there you
know what I was looking this up on
Friday there there were like boot camps
for folks to learn how to be a hacker
but I think some of them got shut down
or there's some it's not exactly the
most like legal clear legal thing yeah I
don't know if that was a joke but I mean
there were folks who were expressing
interest in that I just don't know if
it's like you can I mean you can learn
it's easy to do it I mean there I'm sure
their boot camps online that you could
participate in but I don't think there's
like a physical one you can go to like
career day wouldn't it be cool if there
was yeah I'm like pretty sweet
underground I don't know I'll write the
movie later or not but it would be be
fun Harry Potter for hackers there we go
if that becomes an option and you need a
volunteer to go participate report on
you know who to call all right all right
we are out of time though so thanks
everybody for joining us
thank you to USB for sponsoring the show
today and Roger you want to take us on
out yeah all right our podcast available
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y'all tomorrow bye bye
you
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